Cover Story: Gas prices heading higher.. again

By Jeff Atkinson - bio | email

CHARLOTTE, NC (WBTV) - Have you noticed?  Gas prices are creeping back up again.  Up 30 cents a gallon in the last month alone - even though peak demand time, or summer driving is over.

What's going on here?  Haven't we've been down this road before?  It certainly doesn't bode well both for Thanksgiving driving, which three weeks from now, and the upcoming holiday shopping season.

Consider this gas is higher today that it was a year ago.  We're asking could it slow an economic recovery?

2.62  2.68  2.69  Feeling a little de ja vu?  Peter Tren is filling up his gas-guzzling pickup takes 50-bucks out of his pocket.

"Ouch," he says, "More money. More cost and more fuel."

When the economy was going down the tubes last fall.. one bastion of relief was the corner filling station.

From October 30 to December 31 last year.. gasoline plunged 93-cents a gallon, which was like a generous tax break and it came just in time for the holidays.

But now gas is inching its way back up to 3-bucks a gallon again even though the summer driving season is over.  Isn't it supposed to go lower this time of year not higher?

Senior economic for Wachovia Mark Vitner says, "I think that a good part in the run up in gasoline prices that we've seen over the last few weeks reflects the improving economy. It reflects a pick up in demand for gasoline."

$2.65 a gallon the current Charlotte average is almost a quarter higher than gas was in Charlotte this time last year.

Shelling out more at the pump leaves less money here at the mall.. that could go for even the simple things like pens and paper.  And more expensive things like clothing.. and shoes.. and TVs.

And drivers like Charlene Montigny are noticing.

She says, "You got to go back and forth to work. You got to get the kids to and from. And you have to take it from somewhere. It'll be coming out of the Christmas shopping.. it'll have to."

Making it even less likely that Americans will spend their way out of the recession.

When gas peaked at four bucks a gallon in the summer of '08.. two-thirds of shoppers.. according to surveys.. cut back on other spending so they could still use their cars.

Says Vitner, "So if we get over three dollars a gallon and I would say over 3.50 a gallon then it's going to be a real problem for the economy at a time when we're not seeing any job growth and we've got very limited income growth."

You don't really notice it when it goes up in slow increments, but now we're at 2-65 a gallon.. the current average in Charlotte.

This time last year gas was falling like a lead balloon, by Christmastime it was less than one dollar 55 a gallon.

So why so much higher now?

Oil is traded in dollars and when the dollar is weak as it is now.. investors holding onto other currencies can buy more crude with less money and they have.. and that's driven up the price.

Price of a barrel of oil has doubled since March.. and pump prices have gone along for the ride.

High oil prices have played a role in most all the recessions we've had in the last 30 years.